Customers paying the price for cashless transactions

Several banks have come under fire for charging fees when customers make loan and credit card payments with cash or cheques over the counter or through deposit machines. At least two other banks have announced they would do the same from next month.

The Association of Banks in Malaysia (ABM) says the fees are imposed to “encourage customers to move from cash to electronic payments” but consumer groups argue that this practice is unfair to those who do not do their banking via digital channels.

The fee for making credit card and loan payments over the counter with cash or cheques is RM2 per transaction.

A customer who pays his loan or credit card bill by using cash or cheque deposit machines is charged 50 sen each time.

Federation of Malaysian Consumers Associations (Fomca) chief executive officer Datuk Paul Selvaraj said banks should not penalise consumers who do not know how to perform Internet banking or who do not trust it.

“We are shocked that Bank Negara is allowing this to happen.

“People are already suffering from the high cost of living and it is the role of the government to reduce the burden and not increase it, ” he told The Star yesterday.

Paul noted that the poor and the disadvantaged will be the ones who will be burdened.

National Union of Bank Employees (NUBE) secretary J. Solomon agreed that the fees would affect the lower-income group and people with special needs.

“We are not against introducing technology in the banking sector.

“We are only concerned that there is an imbalance now at the expense of consumers, people with special needs and bank workers, ” he said.

Solomon noted that banks have shifted from being a service-based industry to fee-based one.

He pointed out that with these fees, people have to fork out extra to pay their loan instalments or credit card bills with cash or cheques.

Solomon said banking services should be for everyone and not just those who are comfortable with online banking.

He added that efforts to encourage the public to use online banking were perhaps a way for the banks to eventually reduce their workforce.

“In the last five years, the intake of recruits in the banking sector is minimal and that is one of the reasons for unemployment among the youth, ” he said.

Among the banks that are charging these fees are Affin Bank, CIMB Bank, Public Bank and Standard Chartered.

AmBank and Maybank have told customers that they will start charging these fees on Oct 1.

However, Maybank appears to have removed the announcement from its website.

When announcing the introduction of the fees, the banks have urged customers to make their loan and credit card payments through other channels such as Internet banking and automated teller machines (ATMs).

The banks have also said that they would waive the fees for over-the-counter transactions made by senior citizens and the disabled.

Muslim Consumers Association of Malaysia chief activist Datuk Nadzim Johan described the imposition of the fees as an “unethical way of squeezing money from consumers”.

“There is no reason for them to do this. If they instal a new machine to provide services, then they can go ahead and charge consumers.

“But there is nothing like that in this case, ” he said.

He called on Bank Negara and the Finance Ministry to look into the fees as the public is affected by the practice.

ABM posted a statement on its website yesterday to explain the reason for the fees.

However, it was taken down in the evening.

In the statement, the association said the shift to electronic payments improves the overall efficiency of the payment system and provides meaningful cost savings and efficiency to the Malaysian economy.

It added that electronic payments also increase financial inclusion by extending financial services to a larger segment of the population, enabling them to enjoy lower cost of financial services and better means of savings.

To encourage customers to move from cash to e-payments, ABM said some of its member banks currently impose fees for cheque and cash payments for credit card and financing payments performed over the counter (via teller at bank branch) and via cash deposit machines.

ABM said these fees may be debited from a customer’s credit card or financing account.

“We reiterate that senior citizens (aged 65 and above) and the disabled will not be charged the fees for over-the-counter transactions, ” it said.

On its website, CIMB Bank said it was charging these fees to encourage its customers to make payments via electronic platforms.

“Payments via digital channels are faster, easy and convenient for our customers as they can be made from anywhere without the need of having to visit a branch, ” it said.

The Star

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